Question

Question 6 (ii)
Arif took a loan of Rs 80,000 from a bank. If the rate of interest is 10% per annum, find the difference in amounts he would be paying after $1\frac{1}{2}$ Years if the interest is:
(ii) Compounded half yearly.

Answer 1

(ii) Here, Principal (P) = Rs 80,000,
Time (n) = $1\frac{1}{2}$ years = 3 year (Compounded half yearly)
Rate of interest (R) = 10% = 5% (Compounded half yearly)
Amount (A) = $P{(1+\frac{R}{100})}^n=80000{(1+\frac{5}{100})}^3=80000{(1+\frac{1}{20})}^3$
$=80000{\left(\frac{21}{20}\right)}^3=80000\times \frac{21}{20}\times \frac{21}{20}\times \frac{21}{20}$
=Rs 92,610
Difference in amounts = Rs 92,610 - Rs 92,400 = Rs 210